The Vermont Statutes Online

Title 11A: Vermont Business Corporations

Chapter 010: Amendment of Articles of Incorporation and Bylaws

• Subchapter 001: Articles of Incorporation

• § 10.01. Authority to amend

  (a) A corporation may amend its articles of incorporation at anytime to add or change a provision that is required or permitted in the articles of incorporation or to delete a provision not required in the articles of incorporation. Whether a provision is required or permitted in the articles of incorporation is determined as of the effective date of the amendment.

  (b) A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provision relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.02. Amendment by board of directors

  Unless the articles of incorporation provide otherwise, a corporation’s board of directors may adopt one or more amendments to the corporation’s articles of incorporation without shareholder action:

  (1) to extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

  (2) to delete the names and addresses of the initial directors;

  (3) to delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Secretary of State;

  (4) to change each issued and unissued authorized share of an outstanding class into a greater number of whole shares if the corporation has only shares of that class outstanding;

  (5) to change the corporate name by substituting the word “corporation,” “incorporated,” “company,” “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.,” for a similar word or abbreviation in the name, or by adding, deleting, or changing a geographical attribution for the name; or

  (6) to make any other change expressly permitted by this title to be made without shareholder action. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.03. Amendment proposed by board of directors to the shareholders

  (a) A corporation’s board of directors may propose one or more amendments to the articles of incorporation for submission to the shareholders.

  (b) For the amendment to be adopted:

  (1) the board of directors must recommend the amendment to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders with the amendment; and

  (2) the shareholders entitled to vote on the amendment must approve the amendment as provided in subsection (e) of this section.

  (c) The board of directors may condition its submission of the proposed amendment on any basis.

  (d) The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders’ meeting in accordance with section 7.05 of this title. The notice of meeting must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.

  (e) Unless this title, the articles of incorporation, or the board of directors (acting pursuant to subsection (c) of this section) require a greater vote or a vote by voting groups, the amendment to be adopted must be approved by:

  (1) a majority of the votes entitled to be cast on the amendment by any voting group with respect to which the amendment would create dissenters’ rights; and

  (2) the votes required by sections 7.25 and 7.26 of this title by every other voting group entitled to vote on the amendment. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.04. Voting on amendments by voting group

  (a) The holders of the outstanding shares of a class are entitled to vote as a separate voting group (if shareholder voting is otherwise required by this title) on a proposed amendment if the amendment would:

  (1) increase or decrease the aggregate number of authorized shares of the class;

  (2) effect an exchange or reclassification of all or part of the shares of the class into shares of another class;

  (3) effect an exchange or reclassification, or create the right of exchange, of all or part of all the shares of another class into shares of the class;

  (4) change the designation, rights, preferences, or limitations of all or part of the shares of the class;

  (5) change the shares of all or part of the class into a different number of shares of the same class;

  (6) create a new class of shares having rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;

  (7) increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preference with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class;

  (8) limit or deny an existing preemptive right of all or part of the shares of the class; or

  (9) cancel or otherwise affect rights to distributions or dividends that have accumulated but not yet been declared on all or part of the shares of the class.

  (b) If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (a) of this section, the shares of that series are entitled to vote as a separate voting group on the proposed amendment.

  (c) If a proposed amendment that entitles two or more series of shares to vote as separate voting groups under this section would affect those two or more series in the same or a substantially similar way, the shares of all the series so affected must vote together as a single voting group on the proposed amendment.

  (d) A class or series of shares is entitled to the voting rights granted by this section although the articles of incorporation provided that the shares are nonvoting shares. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.05. Amendment before issuance of shares

  If a corporation has not yet issued shares, its incorporators or board of directors may adopt one or more amendments to the corporation’s articles of incorporation. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.06. Articles of amendment

  A corporation amending its articles of incorporation shall deliver to the Secretary of State for filing articles of amendment setting forth:

  (1) the name of the corporation;

  (2) the text of each amendment adopted;

  (3) if an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself;

  (4) the date of each amendment’s adoption;

  (5) if an amendment was adopted by the incorporators or board of directors without shareholder action, a statement to that effect and that shareholder action was not required;

  (6) if an amendment was approved by the shareholders:

  (A) the designation, number of outstanding shares, number of votes entitled to be cast by each voting group entitled to vote separately on the amendment, and number of votes of each voting group indisputably represented at the meeting;

  (B) either the total number of votes cast for and against the amendment by each voting group entitled to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each voting group and a statement that the number cast for the amendment by each voting group was sufficient for approval by that voting group. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.07. Restated articles of incorporation

  (a) A corporation’s board of directors may restate its articles of incorporation at any time with or without shareholder action.

  (b) The restatement may include one or more amendments to the articles. If the restatement includes an amendment requiring shareholder approval, it must be adopted as provided in section 10.03 of this title.

  (c) If the board of directors submits a restatement for shareholder action, the corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders’ meeting in accordance with section 7.05 of this title. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and contain or be accompanied by a copy of the restatement that identifies any amendment or other change it would make in the articles.

  (d) A corporation restating its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation together with a certificate setting forth:

  (1) whether the restatement contains an amendment to the articles requiring shareholder approval and, if it does not, that the board of directors adopted the restatement; or

  (2) if the restatement contains an amendment to the articles requiring shareholder approval, the information required by section 10.06 of this title.

  (e) Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to them.

  (f) The Secretary of State may certify restated articles of incorporation, as the articles of incorporation currently in effect, without including the certificate information required by subsection (d) of this section. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.08. Amendment pursuant to judicial reorganization

  (a) A corporation’s articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under federal statute if the articles of incorporation after amendment contain only provisions required or permitted by section 2.02 of this title.

  (b) The individual or individuals designated by the court shall deliver to the Secretary of State for filing articles of amendment setting forth:

  (1) the name of the corporation;

  (2) the text of each amendment approved by the court;

  (3) the date of the court’s order or decree approving the articles of amendment;

  (4) the title of the reorganization proceeding in which the order or decree was entered; and

  (5) a statement that the court had jurisdiction of the proceeding under federal statute.

  (c) Shareholders of a corporation undergoing reorganization do not have dissenters’ rights except as and to the extent provided in the reorganization plan.

  (d) This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.09. Effect of amendment

  An amendment to articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than shareholders of the corporation. An amendment changing a corporation’s name does not abate a proceeding brought by or against the corporation in its former name. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• Subchapter 002: Amendment of Bylaws

• § 10.20. Amendment by board of directors or shareholders

  (a) A corporation’s board of directors may amend or repeal the corporation’s bylaws unless:

  (1) the articles of incorporation or this title reserve this power exclusively to the shareholders in whole or in part; or

  (2) the shareholders in amending or repealing a particular bylaw provide expressly that the board of directors may not amend or repeal that bylaw.

  (b) A corporation’s shareholders may amend or repeal the corporation’s bylaws even though the bylaws may also be amended or repealed by its board of directors. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.21. Bylaw increasing quorum or voting requirement for shareholders

  (a) If authorized by the articles of incorporation, the shareholders may adopt or amend a bylaw that fixes a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is required by this title. The adoption or amendment of a bylaw that adds, changes, or deletes a greater quorum or voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

  (b) A bylaw that fixes a greater quorum or voting requirement for shareholders under subsection (a) of this section may not be adopted, amended, or repealed by the board of directors. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)

• § 10.22. Bylaw increasing quorum or voting requirement for directors

  (a) A bylaw that fixes a greater quorum or voting requirement for the board of directors may be amended or repealed:

  (1) if originally adopted by the shareholders, only by the shareholders;

  (2) if originally adopted by the board of directors, either by the shareholders or by the board of directors.

  (b) A bylaw adopted or amended by the shareholders that fixes a greater quorum or voting requirement for the board of directors may provide that it may be amended or repealed only by a specified vote of either the shareholders or the board of directors.

  (c) Action by the board of directors under subdivision (a)(2) of this section to adopt or amend a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)